The newly formed government of Pakistan Muslim League-Nawaz (PML-N) Wednesday unveiled what is being termed as ‘an investment and business friendly budget’ with a total outlay of Rs3.5 trillion for the financial year 2013-14.

Finance Minister, Senator Ishaq Dar presented the budget speech at the special session of the National Assembly convened by President Asif Ali Zardari for presenting proposals for Federal Budget 2013-14.

The budget envisages a record allocation of Rs1.155 trillion for Public Sector Development Program (PSDP) with an aim to stimulate the economy which presently depicts a bleak picture. A big chunk of Rs 225 billion will be spent on energy sector.

The first budget of Nawaz Sharif-led government has allocated Rs627 billion for FY 2013-14 defence compared to Rs570 billion for the preceding year.

Dar proposed an increase in General Sales Tax (GST) from 16 percent to 17, a decision which is going to further raise the prices of commodities for the people already battered by the worst price hike in the country.

As an austerity measure, Ishaq Dar proposed to bring down the expenditures of Prime Minister House by 45 percent, which he claimed will result in a national saving of Rs40 billion.

There will be a complete ban on purchase of new cars for Prime Minister’s office but the ban will not be applicable for law enforcement agencies and other inevitable requirements.

An increase of 10 percent has been proposed in the pension of retired government employees and the minimum monthly pension has been raised from Rs3000 to 5000.

The budget for next fiscal earmarks an amount of Rs75 billion under Income Support Program.

The tax exemption for luxury cars is proposed to be abolished while 1200 cc hybrid cars are being exempted form import duty. A concession of 50 percent has been proposed for 1200-1800 cc cars. Rs20,000 tax will also be applicable on the purchase of 1000 CC cars.

A withholding tax on wedding cermonies being held at commercial venues has also been proposed along with taxes on foreign movies and dramas. Taxes on cigarettes, pan and chahliya have also been increased.

GDP growth rate target for FY 2013-14 has been projected at 4.8 percent and revenue target at Rs2.475 trillion. The non-tax income will be Rs800 billion

The government has allocated Rs185 billion as power subsidy.

Ishaq Dar maintained that the circular debt amounting to more than Rs500 billion will be eliminated in 60 days.

The budget proposes to abolish the ministers’ discretionary funds.

The government will initiate a Prime Minister Laptop scheme in the days to come.

Customs duty on water filtration equipment is proposed to be decreased while the people’s works program renamed as Tamir-e-Watan Pakistan program.

Dar said that the auction for 3G technology will be held soon and the borrowing from the State Bank of Pakistan (SBP) will be reduced.

The rate of inflation will be kept under single digit and its targeted rate for FY 2013-14 has been fixed at 9.5 percent.

He said the government inherited a battered economy and the average rate of inflation stood at 13 percent in last five years.

In the proposed budget for the fiscal year 2013-14, the newly elected Pakistan Muslim League-Nawaz (PML-N) government allocated Rs 240.434 billion for subsidies, which is 35 percent less than the amount earmarked for the purpose in the outgoing fiscal year.The government has targeted this subsidy at the energy sector since Water and Power Development Authority (WAPDA) and Pakistan Electric Power Company (PEPCO) will get 68.7 percent of the total allocation followed by Karachi Electric Supply Company (KESC), which gets a share of 22.9 percent.In budget estimates 2012-13, Rs 208.595 billion were proposed for subsidies, however, later in the revised budget, government had to increase subsidies to Rs 367.472 billion. A total estimate of subsidies for budget 2013-14 is around 0.92 percent of the country’s gross domestic product (GDP). According to breakup, Rs 165.1 billion has been earmarked for Inter Disco Tarrif Differential, Rs 3,000 million has been proposed for Tariff Differential for agri-tubewell in Balochistan and Rs 12,000 million has been allocated to increase WAPDA receivables from Federally Administered Tribal Areas (FATA).In addition, Rs 100 million has been allocated for Exchange Rate Differential for USAID’s grant to power generation companies.Similarly, a total of Rs 55,000 million has been allocated for KESC, while Rs 6,000 million has been allocated for Utility Store Corporation (USC). USC will spend Rs 2,000 million on the ‘Ramzan Package’ and Rs 4,000 million for the sale of sugar.According to budgetary documents, Rs 9,000 million has been allocated for Pakistan Agricultural Storage and Services Corporation (PASSCO).Of the 9,000 million, Rs 4,000 million would be spent on cost differential for sale of wheat while Rs 5,000 million for reserved wheat stock.The budgetary document further stated that for the next fiscal year, an amount of Rs 4,000 million had been allocated for oil refineries and oil marketing companies, Rs 231 million for Fauji Fertilizer Bin Qasim Ltd, Rs 283 million for sale of wheat in FATA, Rs 815 million for sale of wheat in Gilgit-Balitistan and Rs 5 million has been fixed for sale of salt in Gilgit-Baltistan.